OPERATIONAL SUPPORT – YES … DEBT SERVICE – NO NO NO
(Posted 05th October 2020)
Ethiopian Airlines has offered the South African government logistical and operational support for beleaguered South African Airways, but has reportedly made it clear that they will not get involved in the airline’s legacy debt issues, which remains for the South African government and the business rescue team to resolve.
Tewolde Gebremariam, CEO of the Ethiopian Airlines Group, made it very clear to what extend South African could benefit from ET’s support when he said in an interview with Bloomberg yesterday:
‘We don’t want to deal with the legacy issues — the debt, labor claims and so on because that is very difficult for us not only in terms of financial outlay but also in terms of managing the restructuring,” the CEO said. “We want to make it very easy for them to start the airline by providing airplanes, by providing expertise, pilots, technicians, leadership.‘
Ethiopian could indeed provide the kind of leadership needed for SAA – and other airlines on the continent given the recent revelations and allegations about the conduct of board and management at Kenya Airways – which could have the South African flag carrier kickstart operations while the underlying challenges are resolved.
Ethiopian, like South African, are both members of the global Star Alliance and platforms and mechanisms are already in place to engage in bilateral cooperation.
The Ethiopian Airlines Group is one of the world’s most successful aviation enterprises and has in July, at the end of their financial year, been able to declare an albeit sharply reduced profit, despite passenger flight operations being severely curtailed across Africa and the world at the height of the lockdowns when airports were closed for scheduled traffic.
South African Airways, in a further blow to flying at the most economical level, has meanwhile returned all their leased Airbus A350 aircraft, leaving them with a remaining fleet of planes consuming a lot more fuel as well as other related cost such as maintenance.